Building land from foreclosure: A clever investment?
January 13, 2025
Building land in Switzerland is a limited and therefore particularly valuable resource. In popular regions, prices are often high, making acquisition difficult. However, foreclosures offer an attractive opportunity to acquire building land below market value. For investors, builders, and real estate developers, such plots can offer enormous potential. But how does a foreclosure work in Switzerland, and what should one keep in mind?
1. What does a foreclosure of building land mean?
In Switzerland, properties can be subject to foreclosure if their owners can no longer meet their financial obligations. This happens through a debt collection or bankruptcy procedure conducted by a cantonal or federal court authority. The building land is then auctioned publicly, and the highest bidder wins the bid.
Why is buying building land from a foreclosure worthwhile?
- Cheaper acquisition: Since the sale usually serves to pay off debts, prices are often below market value.
- Transparency: The procedures are legally regulated, and there are detailed information about the properties.
- No broker's commission: Since the purchase is made directly through the court, no intermediary fees are incurred.
- Direct use: Undeveloped plots offer a variety of uses, from home projects to value increase through resale.
2. Opportunities and Risks in Buying Building Land
Advantages
- Low starting price: Properties are often offered below market price.
- Value growth: In high-growth regions, the value of a plot can increase significantly within a few years.
- Long-term planning security: Those who acquire a plot can hedge against rising land prices.
Possible Challenges
- Development costs: Not every plot has water, electricity, or road connections. A thorough inspection is essential.
- Building restrictions: In Switzerland, construction zones are clearly defined. It must be checked whether the building land can actually be built on.
- Environmental regulations: Some areas may be limited due to conservation rules or soil contamination.
3. How to find interesting plots?
In Switzerland, foreclosures are organized by cantonal bankruptcy offices and debt collection offices. They are listed in public announcements, official gazettes, or on official websites.
A particularly efficient way to search for foreclosures and obtain detailed information is offered by Local Auction. This platform lists available auction objects in Switzerland and significantly facilitates the search for interesting plots.
Interested parties should thoroughly research the plot in advance. It is worth viewing an extract from the land register as well as the current zoning plan.
4. Successfully Investing in Building Land from Foreclosures
1. Check legal framework conditions
A comprehensive examination of the land register is essential to identify encumbrances such as mortgages or servitudes. Additionally, the building regulations of the municipality should be reviewed.
2. Clarify development and building zones
Is the plot fully developed? If not, high additional costs for electricity, water, and access roads may incur.
3. Calculate budget realistically
In addition to the purchase price, costs for notary, fees, and possibly investments to make the plot usable arise.
4. Analyze market and region
What development opportunities does the region offer? Is an increase in real estate prices to be expected?
5. Understand the bidding process
It is advisable to attend some auctions as an observer first. Participation often requires a security deposit.
5. Conclusion: Is building land from foreclosure a good choice?
"Building land from foreclosures offers one of the few chances to acquire plots below market value in Switzerland. With thorough review and strategic planning, this can become a lucrative investment."
For investors with foresight, acquiring building land through foreclosures can be an excellent opportunity. The key is thorough research, accurate calculation, and understanding the Swiss real estate market.
